Networks vary widely in their nature and operation, depending on the particular actors involved, their relationships, the level and scope at which they operate, and the wider context. The actors within a network might be people, families, organizations, corporations, states, or a mixture of individuals and groups. The relationships between actors within a network can vary from close ties—such as those within a family—to occasional impersonal or mediated interactions. Networks can exist in unstructured social environments as well as in highly formalized, rule-bound settings.

Network theory

Network theory arose from a number of overlapping trends in social theory. Most of those trends developed as part of a shift to comparatively ahistorical forms of social analysis in the first half of the 20th century. Functionalism, structuralism, systems theory, and other such approaches attempted to explain social facts partly in terms of synchronic relationships. The nature and behaviour of a unit derived from its function or place within a larger whole. The concept of a “network” appeared as one way of describing some of the relevant wholes: a network was a whole composed of a set of actors or units and their relations to one another.

Within the social sciences, the concept of a network became popular in a variety of areas. In ethnography, it provided a way of conceptualizing not only family relationships but also migratory patterns from tribal villages to cities. In social psychology, it provided a way, especially within sociometry, of examining the interpersonal relationships within groups so as to identify informal leaders and social rankings. For many people, the most obvious uses of the concept of a network today are within information technology. The World Wide Web is the “net,” a set of interlinked computers forms a network, and so on.

Characteristics of networks

Networks are often discussed by contrasting them with two other modes of coordination and organization: markets and hierarchies. One respect in which the three modes differ is the basis of the relationships between the actors in them. Thus, markets are based on property rights and contracts, hierarchies are based on something like an employment relationship, and networks are based on the exchange of resources. Another difference is the medium of exchange between actors: markets rely on prices, hierarchies rely on authority, and networks depend on trust. A third difference is the means of resolving conflicts: market systems use bargaining and the courts, hierarchies use rules and commands, and networks use tactful negotiation or diplomacy. A final difference might be culture: it is thought that markets have a competitive culture, hierarchies instantiate a culture of subordination, and networks encourage a culture of reciprocity.

The distinctive properties of networks are usually traced to the interdependence of their actors. Their interdependence means that actors cannot attain their aims unless they cooperate with others. Hence, networks differ from markets, in which actors are independent of each other and are able to achieve their goals through buying and selling. The interdependence of actors also means that no single actor can order others to act in a certain way, and no actor is so dependent on others that it must obey those others’ commands. Hence, networks differ from hierarchies, in which the authority of one actor enables it to compel the compliance of others.

Some social theorists have sought not only to distinguish networks from other types of organization but also to draw up typologies of different types of network. One simple typology is that between formal and informal networks. Formal networks are associated, say, with legalism, planning, the management of decisions, and a structured allocation of resources. Informal networks, in contrast, are linked with trust, discussion, collegiality, and unstructured exchanges.

Advantages and shortcomings of networks

Advocates of networks ascribe a range of advantages to them. Typically, networks are said to offer a kind of dynamism and flexibility that hierarchies cannot and to foster cooperation and stable relationships in a way that markets cannot. Some advocates of networks argue that those advantages are especially relevant to the contemporary world. They argue that the increasing complexity and interconnectedness of the world and the increasing pace of change put a premium on the kind of dynamism and flexibility that are associated with networks. Many contemporary problems require the state to engage diverse organizations for special funding, resources, or expertise. They also argue that the rise of new knowledge-based industries means that prosperity and efficiency increasingly depend not on competition but on the kinds of cooperative and open practices that facilitate the exchange of ideas and information. Public-sector, voluntary-sector, and private-sector organizations all benefit from stable and creative relationships based on trust and participation.

Notwithstanding those advantages, even advocates of networks acknowledge that they are not always appropriate and that the state should rely on a mixture of hierarchies, networks, and markets, adopting whatever organizational form is most appropriate in a given case. Other critics worry that the proliferation of networks has gone too far. They accept that networks have benefits, but they argue that in some circumstances networks can lead to a fragmented and unwieldy system of governance in which the state loses the ability to effectively implement public policies. Perhaps the main criticism of networks, however, is that they can undermine democratic values such as accountability, because their sheer institutional complexity obscures who is accountable to whom and for what.

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